1 COMPETITION AND MARKETS AUTHORITY 2 RETAIL BANKING MARKET INVESTIGATION 3 4 5 Notes of a hearing of a Banking Roundtable 6 held at Competition and Markets Authority, Southampton Row, London 7 on Tuesday, 24 November 2015 8 9 PRESENT: 10 11 FOR THE COMPETITION AND MARKETS AUTHORITY 12 Alasdair Smith - Chairman 13 Tom Hoehn - Member 14 Philip Marsden - Member 15 Jill May - Member 16 Ed Smith - Member 17 18 FOR THE STAFF 19 Joanna Benison - Inquiry Director 20 Julie Bon - Director of Economics 21 Colin Garland - Director of Remedies, Business and Financial 22 Analysis 23 Veronica Mansilla - Assistant Director of Economics 24 Victoria Palmer - Assistant Legal Director 25 Robert Whithard - Economist 26 Chris Whitcombe - Assistant Director of Economics 27 28 FOR BANKS 29 Julia Cattanach - Tesco Bank 30 David McCreadie - Tesco Bank 31 Sarah Williams-Gardener - Starling Bank 32 Richard Hemsley - Virgin Money 33 Andrew Emuss - Virgin Money 34 Ben Ruffels - Virgin Money 35 Jay Sheth - Virgin Money 36 Ant Warrington - Yorkshire Building Society 37 Sarah Alton - Yorkshire Building Society 38 Paul Lynam - Secure Trust Bank 39 Will Curley - Tesco Bank 40 David Rockliff - Tesco Bank 41 Michael Strachan - Tesco Bank 42 43 Digital Transcription by WordWave International Ltd trading as DTI 44 8th Floor 165 Fleet Street London EC4A 2DY 45 Tel No: 0207 404 1400 4043 Fax No: 0207 404 1424 46 Email: [email protected] 47 1 THE CHAIRMAN: Welcome to all of you. Thank you all very much for coming to this 2 meeting. This is the first of our series of roundtables and hearings in 3 response to our Provisional Findings and Remedies Notice. 4 We are obviously very keen to hear views, from everyone interested in retail 5 banking, on our work so far. That would be a major assistance in guiding the 6 rest of our programme of work. 7 A very warm welcome to you all let us start with introductions and then I will 8 hand over to Joanna, who is going to conduct the meeting. I am Alasdair 9 Smith, I am the chair of the retail banking inquiry group. 10 Q. (Ms Benison) Joanna Benison, I am one of the two inquiry directors on the 11 investigation. 12 A. (Mr Lynam) I am Paul Lynam. Chief executive of Secure Trust Bank 13 Q. (Mr Smith) Ed Smith, inquiry member. 14 A. (Ms Alton) Sarah Alton, Yorkshire Building Society. 15 A. (Mr Warrington) Ant Warrington, from Yorkshire Building Society. 16 Q. (Ms May) Jill May, inquiry member. 17 Q. (Ms Mansilla) Veronica Mansilla, assistant director of economics. 18 Q. (Mr Garland) Colin Garland, director of remedies, business and financial 19 analysis. 20 Q. (Ms Palmer) Victoria Palmer, assistant legal director. 21 A. (Ms Cattanach) Julia Cattanach, for Tesco. 22 A. (Mr McCreadie) David McCreadie from Tesco. 23 Q. (Mr Hoehn) Tom Hoehn, inquiry member. 24 Q. (Mr Marsden) Philip Marsden, inquiry member. 25 A. (Mr Hemsley) Richard Hemsley, chief banking officer, Virgin Money. 2 1 A. (Mr Emuss) Andrew Emuss, general counsel, Virgin Money. 2 A. (Mr Sheth) Jay Sheth, head of economics, policy and public affairs, Virgin 3 Money. 4 A. (Mr Ruffels) Ben Ruffels, head of public affairs, Virgin Money. 5 A. (Mr Strachan) Michael Strachan, head of communications, Tesco. 6 A. (Mr Curley) Will Curley, director of transactional banking, Tesco Bank. 7 A. (Mr Rockliff) David Rockliff, Tesco Bank. 8 Q. (Mr Whithard) Robert Whithard, economist. 9 Q. (Mr Witcomb) Chris Witcomb, assistant director of economics. 10 THE CHAIRMAN: Okay, thank you very much. Joanna, over to you. 11 Q. (Ms Benison) Thank you. Welcome and, as Alasdair said, this is one of the 12 first response roundtable hearings that we are conducting following the 13 publication of our Provisional Findings and Remedies Notice. 14 We have sent a presentation to participants in our roundtable and we very 15 much hope you that you had a chance to look at it. This will set the scene for 16 what we are trying to cover today. Our main objective is to talk about what is 17 next. What remedies we are proposing and what we can do. 18 THE CHAIRMAN: Sarah, welcome. I am afraid you have missed the round of 19 introductions and I think we will not do it again but people have their names in 20 front of them. Welcome, I am glad you are here. 21 Q. (Ms Benison) Just to continue, so the focus of today is to get your feedback 22 on our proposed remedies but, we would really welcome your views on 23 Provisional Findings as well, so we will try to make sure that throughout today 24 we have sufficient time to cover everything. 25 Just a very brief overview of where we are in the process. You might have 3 1 seen it in the slides. I am looking at slide number three, so as I said we have 2 just published our Provisional Findings and Remedies Notice and the next big 3 milestone in our 18-month inquiry is provisional decision on remedies and that 4 is planned to be published in February. That will then be followed by our final 5 report and the statutory deadline and that is 5 May next year. 6 The objective today is to discuss our remedy proposals. The way we 7 structured the conversation is very much around those proposals, so we 8 would like to first focus on our remedies around shopping around and 9 switching, particularly on PCAs, given the participation today, but also, if we 10 can, on BCAs as well. 11 In particular, we will cover the consumer journey, starting from the awareness 12 then moving to assessing and accessing information around available 13 products and then moving to acting on it and the actual switching. As you 14 may remember from our Remedies Notice, our package of remedies is 15 structured around that consumer journey. 16 We will also like to cover today SME lending. We realise that not all the 17 attendees have business in this area but if we can still try to cover certain 18 questions around that that would be appreciated. Towards the end, we will 19 also try to give the floor to you to talk about the remedies that we may not 20 have thought about. We would really welcome any fresh ideas from the 21 participants today and also talk about what we highlighted in our Remedies 22 Notice that we are not at this stage minded to pursue. However, as it is a 23 provisional stage and for remedies it is a very early thinking, then obviously 24 there is an opportunity to move the agenda forward and introduce or revisit 25 what we have done so far or potentially introduce new ideas. 4 1 I would like to also remind everybody that you are in the presence of your 2 competitors, so can you please keep that in mind in making your statements. 3 As is our usual practice, as you can see the conversation is being recorded 4 and will be transcribed and that transcription will be published on our website. 5 You will obviously have an opportunity to look at the transcription before we 6 publish it. 7 I will try to keep an eye on the watch and move the conversation forward as 8 much as we can but today is really for our Panel Members to explore with you 9 any questions that they have. With that in mind, unless there are any 10 questions? 11 We will obviously take a break at some point and we will have lunch around 12 12.30 pm. We plan to finish at 2.00 pm, so we will try to keep that lunch to a 13 minimum and have a working lunch if possible, depending on the 14 conversation, but I will let you know as soon as the conversation reaches that 15 point. That is it from me, are there any questions? 16 A. (Mr Emuss) Just in terms of the time allocations, between the various topics 17 and you said towards the end we will talk about remedies not pursuing or 18 other potential remedy options, what sort of time period will we allocate to 19 that? 20 Q. (Ms Benison) The time allocations are very much equal among the various 21 agenda items, so we will just make sure that there is a huge chunk of time 22 that is allocated to that. 23 If there are no other questions, I suggest we move to the first agenda item, 24 which is around shopping around and switching. Tom will start with some 25 questions around awareness and our remedies related to prompting 5 1 customers to look around and switch. 2 Q. (Mr Hoehn) Thank you. This is very much to start off the discussions and we 3 would like to hear from you. What we want to discuss are the various 4 remedies, particularly those measures to promote engagement and get 5 customers to consider switching to alternative providers. The two remedies 6 that I would like to focus on or ask you to focus on are first the Remedy 1, 7 prompting customers to review providers at certain times, then, looking at 8 increasing awareness of potential savings, improvements in quality of service, 9 rewards if you were to switch. 10 First of all, I am interested in your views on the proposed general approach of 11 using triggers to prompt customers and we can maybe first talk about PCAs.